ABU DHABI. Oct 9: Arab states have created a joint institution that will give them greater access to the performance of their financial bodies and ensure security for domestic investors, the organization's sponsor said yesterday.

The World Bank will help in the operation of the company for the evaluation and classification of credit adequacy. the first of its kind in the Arab world, said the Abu Dhabi-based Arab Monetary Fund (AMF).

AMF Chairman. Jassim AL Manai. signed the agreement for the new venture in Washington, where he was attending joint meetings of the World Bank and the International Monetary Fund, it said in a statement sent to AFP.

The contract was signed with the World Bank’s International Finance Corporation and the company would begin operation before the end of the year.

'The new company is part of the efforts to activate stock

markets in the Arab world and expand the investors base, it said.

"It will strengthen the official Arab auditing bodies like the central banks and the Stock market managements in auditing bodies like the central banks and the stock market managements In the auditing and supervision of the activities of the financial institutions in the region. This will contribute to protecting the rights of dealers and investors in the Arab markets."

The statement gave no details of the functions of the company or its headquarters but AMF sources said it could be based at the fund.

The creation of the company coincides with reforms in the Arab banking sector following guidelines by the Bank for International Settlement (BIS) for banks worldwide to boost their capital adequacy to atleast eight per cent to ensure they have enough funds to face any financial crisis.